Tough rules increase profit warnings

The caution follows the rise in profit warnings and an Auditing Practices Board consultation document on ‘aggressive earnings management’ ? massaging the books to make results look better.

Mark Dixon, chief executive of office rental company Regus, which recently issued a profit warning, said: ‘We’?re not the first company and we won’t be the last. There are a lot more companies out there that should be issuing warnings now.’

Deloitte & Touche said: ‘More consideration needs to be given to what could be done to prevent the increasing pressure on directors to carry out aggressive earnings management.’